AUSTRALIA

Pace of international-retailer expansion in Australia picks up, but a number of local markets remain relatively untapped

2016-05-26T14:00:00Z

JLL’s new global research report, Destination Retail 2016, discusses key retailer trends across the world

​​​Australia, often regarded as one of the most advanced retail markets globally, currently falls behind many global markets in terms of overall presence of international retailers. While major retail brands such as H&M and UNIQLO have picked up the pace of their expansion in Australia over 2015 and 2016 by opening CBD flagship stores and committing to space in suburban shopping centres, a number of Australian retail markets remain relatively untapped.

JLL Research Manager, Jenny Dong, said, "Of the top 10 international apparel, cosmetics and homewares retailers actively expanding in Australian shopping centres, JLL estimates that they have collectively leased close to 100 stores, spanning approximately 130,000 sqm, an area the size of Westfield Bondi Junction.

"With strong saturation across Asia-Pacific cities, many international retailers are poised to expand further across the region and in Australia. We have seen numerous new entrants in the Australian market over the past five years and we expect this trend to continue. Global retail groups, such as LVMH, Kering and Inditex, are expected to bring many more of their brands into our cities as part of their ongoing expansion strategies, growing their store and distribution networks," said Ms Dong.

JLL's Head of Retailer Representation - Australia, Cameron Taudevin said, "Major international retailers typically require larger store formats than some domestic groups. The availability of suitable sites has delayed the entry of many of these groups in the past.

"Many Australian shopping centre landlords are currently undertaking significant redevelopment works at centres within their portfolios, which in turn has provided the opportunity for international retailers to expand their store networks. Current redevelopments at Pacific Fair on the Gold Coast and Pacific Werribee in Melbourne, and Melbourne's newest CBD shopping centre, the recently completed, St. Collins Lane, have each secured a suite of international brands, including H&M, UNIQLO, Tiffany & Co, TAG Heuer, Reiss, Sandro and Maje.

"The recent wave of international retailer arrivals has mostly focussed on CBD locations in Sydney and Melbourne during the initial expansion into the Australian market. International retailers are gradually moving into regional shopping centres in suburban Sydney and Melbourne locations but have yet to gain a significant presence in other markets. There remains plenty of opportunities for these retailers to secure quality retail space in each of our capital cities, particularly in the broader, relatively untapped Brisbane, Perth and Adelaide markets. But it's knowing where to look," said Mr Taudevin.

As JLL's Destination Retail 2016 report points out, retailers who succeed in acquiring the right space in the right place and at the right time will benefit from successful and profitable growth. While the role of the physical store may be changing, it remains core to retailing. Careful planning and thorough due diligence are crucial for long-term success.

The research report ranks 140 cities by their appeal to cross-border retailers, and classifies Sydney and Melbourne as 'Mature Retail Cities', ranking 61 and 63 respectively. Mature Retail Cities are characterised by strong domestic sales and domestic brands, stable growth outlooks and an affluent consumer base. Real estate markets in Mature Retail Cities are considered to be transparent and legislation is often favourable towards international retail brands. Other Mature Retail Cities include Miami, Honolulu, Barcelona and Frankfurt, behind Global Retail Cities, such as London, Hong Kong and New York.

About Destination Retail 2016

The analysis looks at the presence of brands in the specific cities covered, as well as retailers that are opening imminently. It focusses solely on retailers' own shop networks, including franchises. Retailer concessions are excluded as are second-line brands, multi-label stores and branded shops within department stores, due to the lack of transparency. The study sample consists of 240 international retail brands; each brand has a significant presence in at least two global regions, those being the Americas, Asia Pacific, Europe and the Middle East and Africa region.